Tiefenthaler v. Biersach

• Citation: 182 Wis. 245,196 N.W. 211
• Parties: TIEFENTHALER v. BIERSACH.
• Decision Date: 11 December 1923
• Court: Wisconsin Supreme Court

182 Wis. 245

196 N.W. 211

TIEFENTHALER

v.BIERSACH.

Supreme Court of Wisconsin.

Dec. 11, 1923.

Appeal from Circuit Court, Milwaukee County; Walter Schinz, Judge.

Action by E. J. Tiefenthaler against Eugene Biersach. Judgment for plaintiff, and defendant appeals. Affirmed.

Action on a promissory note. The note was executed by Eugene Biersach on June 20, 1921, in the sum of $1,000, payable to himself 12 months from date. It was indorsed by Biersach and delivered to one Osborne in payment for stock which defendant was to receive at a later time. Thereafter the note was indorsed in blank by Osborne and delivered to one Owen. Owen sold the note on July 5, 1921, without indorsing it, to plaintiff for $900. The note having been dishonored upon maturity, it was duly protested by plaintiff, and suit was begun against the maker in civil court. The indorser, Osborne, was then a fugitive from justice.

Plaintiff testified that he bought the note relying upon the judgment and statements of Owen, who told him that he had inquired at the bank and found that the signature was good and that Biersach was the owner of considerable property. Defendant testified that he gave the note in payment for stock, which was to be delivered at a future date; that the note was not to be effective until the delivery was made; that no revenue stamp was to be placed upon the note until such delivery; and that there was attached to the note at the time of signing, a paper setting out the foregoing agreement. This agreement was not pinned to the note, but was fastened by paper clips.

Defendant testified that Osborne had said he (Osborne) would have to place a stamp on the note before it would be valid. The note was introduced in evidence. It bore a revenue stamp, upon which had been indorsed the initials “E. B.” and “O.”

At the close of the testimony the court directed a verdict for plaintiff for the amount of the note, with interest, and judgment was ordered accordingly. The circuit court affirmed the judgment.W. C. Seefeld, of Milwaukee, for appellant.

Henry J. Bendinger, of Milwaukee, for respondent.

JONES, J. (after stating the facts as above).

It is claimed by counsel for appellant that the note in question was obtained by fraud; that the title of Osborne, who negotiated the note, was defective; and that under sections 1676--25 and 1676--29, Stats., the burden was placed upon plaintiff to prove that he acquired title as holder in due course. It is claimed by respondent's counsel that the representations made at the time of the execution of the notes did not amount to fraud, within the meaning of section 1676--25. We shall not discuss this question, since we are convinced that plaintiff met the burden of proof required by section 1676--29, Stats.

[1] Only two objections are raised to the adequacy of the proof that plaintiff became a holder in due course under section 1676--21, Stats. The first is that he procured the note at a discount. The note of $1,000 was purchased for $900 of persons dealing in commercial paper, after plaintiff was assured by one of the partners that the note was all right. Undoubtedly, if plaintiff had bought the note, given by a person known to be solvent, for a mere nominal sum or a grossly inadequate price, it would be constructive notice of the invalidity of the note in the hands of the seller, and he would have bought at his peril. De Witt v....